[Senate Hearing 115-670]
[From the U.S. Government Publishing Office]


                                                    S. Hrg. 115-670

                  FROM JOINT PAIN TO POCKET PAIN: COST
          AND COMPETITION AMONG RHEUMATOID ARTHRITIS THERAPIES

=======================================================================

                                HEARING

                               BEFORE THE

                       SPECIAL COMMITTEE ON AGING

                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS


                             SECOND SESSION

                               __________

                             WASHINGTON, DC

                               __________

                            FEBRUARY 7, 2018

                               __________

                           Serial No. 115-14

         Printed for the use of the Special Committee on Aging

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                       SPECIAL COMMITTEE ON AGING

                   SUSAN M. COLLINS, Maine, Chairman

ORRIN G. HATCH, Utah                 ROBERT P. CASEY, JR., Pennsylvania
JEFF FLAKE, Arizona                  BILL NELSON, Florida
TIM SCOTT, South Carolina            KIRSTEN E. GILLIBRAND, New York
THOM TILLIS, North Carolina          RICHARD BLUMENTHAL, Connecticut
BOB CORKER, Tennessee                JOE DONNELLY, Indiana
RICHARD BURR, North Carolina         ELIZABETH WARREN, Massachusetts
MARCO RUBIO, Florida                 CATHERINE CORTEZ MASTO, Nevada
DEB FISCHER, Nebraska                DOUG JONES, Alabama
                              ----------                              
                 Kevin Kelley, Majority Staff Director
                  Kate Mevis, Minority Staff Director
                                
                               CONTENTS

                              ----------                              

                                                                   Page

Opening Statement of Senator Susan M. Collins, Chairman..........     1
Statement of Senator Robert P. Casey, Jr., Ranking Member........     3

                           PANEL OF WITNESSES

Patricia Bernard, Rheumatoid Arthritis Patient, Falmouth, Maine..     4
William F. Harvey, M.D., Rheumatologist, Associate Professor of 
  Medicine, Clinical Director, Division of Rheumatology, Tufts 
  Medical Center, Boston, MA.....................................     6
Jack Hoadley, Ph.D., Research Professor Emeritus, Health Policy 
  Institute, McCourt School of Public Policy, Georgetown 
  University.....................................................     8
Terry G. Mahn, J.D., Managing Principal, Regulatory and 
  Government Affairs Practice Group Leader, Fish & Richardson, 
  Washington, DC, and Advisory Board Member, Bloomberg BNA 
  Pharmaceutical Law and Industry Report, Washington, DC.........    10

                                APPENDIX
                      Prepared Witness Statements

Patricia Bernard, Rheumatoid Arthritis Patient, Falmouth, Maine..    32
William F. Harvey, M.D., Rheumatologist, Associate Professor of 
  Medicine, Clinical Director, Division of Rheumatology, Tufts 
  Medical Center, Boston, MA.....................................    33
Jack Hoadley, Ph.D., Research Professor Emeritus, Health Policy 
  Institute, McCourt School of Public Policy, Georgetown 
  University.....................................................    37
Terry G. Mahn, J.D., Managing Principal, Regulatory and 
  Government Affairs Practice Group Leader, Fish & Richardson, 
  Washington, DC, and Advisory Board Member, Bloomberg BNA 
  Pharmaceutical Law and Industry Report, Washington, DC.........    43

                  Additional Statements for the Record

Chart: Humira Global Costs for 28-day Supply.....................    54

 
                  FROM JOINT PAIN TO POCKET PAIN: COST
          AND COMPETITION AMONG RHEUMATOID ARTHRITIS THERAPIES

                              ----------                              


                      WEDNESDAY, FEBRUARY 7, 2018

                                       U.S. Senate,
                                Special Committee on Aging,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:31 a.m., in 
room SD-562, Dirksen Senate Office Building, Hon. Susan M. 
Collins (Chairman of the Committee) presiding.
    Present: Senators Collins, Tillis, Fischer, Casey, Nelson, 
Gillibrand, Blumenthal, Donnelly, and Cortez Masto.

    OPENING STATEMENT OF SENATOR SUSAN M. COLLINS, CHAIRMAN

    The Chairman. The hearing will come to order.
    Good morning. Prescription drugs are vital to the health 
and well-being of Americans, especially our Nation's seniors, 
90 percent of whom take at least one prescription drug in any 
given month. For many Americans, access to affordable 
prescription drugs is not only critical for health, but also 
can be literally a matter of life or death.
    Developing these medicines is a lengthy, expensive, and 
uncertain process. It often takes more than a decade to bring a 
new drug from the laboratory to the market. The process is 
often very costly, and most drugs fail during testing.
    If we want new medicines to reach consumers who need them, 
the companies that invest in the research and take the risks 
necessary to develop these drugs must see a fair return on 
their investment.
    At the same time, we cannot be blind to the costs of these 
drugs, nor to cases where patent laws are manipulated to 
preserve monopolies. Americans are expected to spend more than 
$387 billion on prescription drugs this year alone. Of this 
amount, individuals will pay about $48 billion out-of-pocket. 
The Federal Government is a major payer and will pick up 
another $172 billion in payments through Medicare, Medicaid, 
Veterans Affairs, and other programs. And, of course, the cost 
of prescription drugs affects what we pay for private health 
insurance as well.
    While we understand that research and development are 
expensive, consumers are also familiar with reports of 
prescription drugs that have undergone significant and 
unwarranted price increases. Last Congress, this Committee 
conducted a bipartisan investigation into the sudden, dramatic 
price increases of certain decades-old prescription drugs.
    At the end of our investigation, we published a report 
documenting cases in which companies that had not invested a 
single dollar in the research and development of a drug, 
nevertheless bought it, hiked its price to an unconscionable 
level.
    Today the Committee will examine why prices have soared for 
drugs used to treat a disease affecting 1.3 million Americans--
rheumatoid arthritis, a chronic autoimmune and inflammatory 
condition that attacks the linings of joints. Untreated, RA can 
lead to permanent joint damage and is associated with 
significant morbidity. While it can begin at any age, the 
likelihood of onset increases with age and is highest among 
women in their 60's.
    Biologic medicines have proven life-changing for many 
patients, halting the progression of symptoms and allowing them 
to remain actively engaged at work, at home, and in life. 
Derived from living organisms, biologics are much more complex 
than their chemical counterparts. They may require special 
handling and are often administered by injection or infusion. 
Sometimes referred to as ``specialty drugs,'' these medicines 
can have astonishingly high price tags that are continuing to 
increase every year.
    For example, the price of Humira, a self-administered 
biologic approved at the end of 2002 to treat RA, has risen 
from about $19,000 per year in 2012 to more than $38,000 per 
year today. Enbrel, another biologic that was first approved 
for treatment of RA in 1998, costs about the same. Sales of 
Humira reached $16.1 billion in 2016. It is the world's best-
selling pharmaceutical drug, and Enbrel is No. 3.
    The FDA approved biosimilars for both Humira and Enbrel in 
2016, but neither has come to market. That is disturbing since 
we know that competition tends to drive down prices or at least 
curb increases. In the case of Remicade, a less expensive 
biologic approved for treatment of RA, two biosimilars did come 
to market at discounts of 15 and 35 percent. That raises the 
important question: Why haven't the biosimilar competitors of 
Humira and Enbrel become available to consumers? According to 
reports, Humira is covered by more than 100 patents, many of 
which were added as the expiration date of the drug's main 
patent approached in 2016.
    Similarly, Enbrel's main patent has expired, yet the drug 
remains protected by at least two other so-called submarine 
patents nearly 20 years after it was first approved by the FDA. 
According to a CRS report from 2017, five of the seven 
biosimilars that had been approved by the FDA ``have been 
delayed, or alleged to be adversely impacted, by actions of the 
brand-name manufacturers.''
    Treating rheumatoid arthritis costs the U.S. health care 
system an estimated $19 billion a year. As a result of the 
increasing costs of these vital drugs, we hear of the struggles 
of older Americans who face not only the pain of the disease, 
but also the financial pain associated with maintaining 
treatments.
    One of these patients is my constituent, Patty Bernard. She 
is among the more than 8,000 people in Maine who live with 
rheumatoid arthritis. Mrs. Bernard is 80 years old--I hope you 
do not mind that we told your age at this hearing--and she was 
diagnosed with rheumatoid arthritis at age 55. In the early 
years of her diagnosis, she tried many different drugs, but her 
symptoms continued to get worse.
    In 1998, when Enbrel came to market, she was one of the 
first in Maine to try the drug. She calls the medicine ``God-
given.'' Joint by joint, she felt her life come back. When Mrs. 
Bernard retired last year, she learned that on Medicare she 
would have to pay $3,800 per month for the medication, an 
unaffordable cost.
    We look forward to hearing from all of our witnesses today 
and to better understanding what can be done to moderate the 
price of prescription drugs without discouraging the innovation 
that helps us live healthier lives.
    I look forward to hearing from our witnesses, and I now 
turn to our Ranking Member, Senator Casey, for his opening 
statement.

  OPENING STATEMENT OF SENATOR ROBERT P. CASEY, JR., RANKING 
                             MEMBER

    Senator Casey. Thank you, Chairman Collins, for holding 
this hearing today. We want to thank our witnesses for your 
presence here and your testimony.
    Over 54 million Americans are living with arthritis, 
including 3 million just in the State of Pennsylvania alone. 
The prevalence of arthritis increases with age. Half of 
Americans age 65 and older are diagnosed with arthritis, and 
women are at a greater risk of arthritis than men. Three times 
more women than men are living with rheumatoid arthritis, as 
the Chairman noted. As she also noted, this is one of the more 
severe types of this disease.
    The sheer number of people who may be diagnosed with 
arthritis gives us good reason to examine this illness and its 
treatments. We must promote pathways to foster innovation and 
promote access to life-changing medications. Indeed, with the 
emergence of novel treatments for rheumatoid arthritis over the 
last two decades, people are living longer, fuller lives. But 
these treatments are not always affordable. One of our 
witnesses here today, Dr. Harvey, will tell us about the impact 
this has had on patients.
    Americans living with arthritis--just like any other 
disease or condition--must be able to access and afford the 
treatments they need. No baby boomer or senior should go 
without care simply because the price tag is too high or the 
out-of-pocket cost is too great. No one should live in fear 
that one day they will not be able to afford the medicine that 
allows them to live and work in their community.
    It is for this reason that I was pleased to help close the 
Medicare prescription drug coverage gap--known by that benign 
phrase, ``donut hole''--as part of the Affordable Care Act. 
Already since that time, over 275,000 Pennsylvanians with 
Medicare saved almost $1.6 million on their prescription 
medications because of this change. Now, that is the good news.
    But as we will hear today, there is much more that can be 
done to ensure that seniors and people with disabilities can 
afford life-sustaining and life-saving treatments. These are 
issues that span research and innovation, regulatory approvals, 
market forces, and coverage. Our witnesses will shed light onto 
these different factors and more. I look forward to the 
Committee's discussion, and, Madam Chair, I would note for the 
record that two of our witnesses have roots in Pennsylvania, 
but once they move out, I cannot claim them--Dr. Hoadley as 
well as Dr. Harvey. But we are grateful they are here with us.
    Thank you.
    The Chairman. Thank you very much. And I also want to 
welcome Senator Cortez Masto and Senator Fischer to our hearing 
today. We will now move to the introductions of our witnesses.
    Our first witness is Patricia Bernard from Falmouth, Maine. 
Mrs. Bernard, as I explained in my opening statement, lives 
with rheumatoid arthritis. Her condition was debilitating, but 
with the advent of biologic therapy, she has gained control 
over her condition and her life. She was stable with Enbrel for 
nearly two decades until she retired at 79 and could no longer 
receive the drug once she transitioned to Medicare. She will 
describe her journey with rheumatoid arthritis and the impact 
of the skyrocketing cost of treatment.
    Dr. William Harvey is the director of the Division of 
Rheumatology at Tufts University School of Medicine. He is also 
a longstanding member of the American College of Rheumatology, 
and he will share his experiences as a physician not only 
diagnosing and treating seniors, but also serving as an 
advocate to help his patients obtain and maintain the treatment 
they need in the face of soaring costs.
    Also joining us today is Dr. Jack Hoadley. Dr. Hoadley has 
30 years of experience in the health policy field and currently 
conducts research on health care financing at Georgetown 
University's Health Policy Institute. He is a member of the 
Medicare Payment Advisory Commission, better known as MedPAC.
    We also welcome Terry Mahn, a distinguished attorney and 
managing principal of Fish & Richardson's Washington, DC, 
office. He is also group leader for the firm's Regulatory and 
Governmental Affairs Practice and an adviser for Bloomberg BNA 
Pharmaceutical Law and Industry Report.
    We look forward to hearing from all of you and appreciate 
your joining us and hope that you all can get back home after 
the hearing.
    Mrs. Bernard, we will start with you. Thank you.

 STATEMENT OF PATRICIA BERNARD, RHEUMATOID ARTHRITIS PATIENT, 
                        FALMOUTH, MAINE

    Mrs. Bernard. Good morning. Thank you, Chairman Collins, 
Ranking Member Casey, and distinguished members of the 
Committee for inviting me to testify before you today.
    My name is Patty Bernard. I will turn 81 in July, and I 
have rheumatoid arthritis. I have lived with diagnosed RA since 
I was 55. Before the diagnosis and treatment, I experienced 
excruciating pain--day in and day out. Every bone in my body 
ached. The pain made ordinary tasks difficult, often 
impossible. I would come home from work and take hot, hot 
showers. It was the only thing that relieved my pain--even just 
temporarily.
    I finally visited a rheumatologist and learned that I had 
RA. In fact, at that time my doctor informed me that 79 percent 
of my body was inflamed. It was very difficult to hear the 
doctor tell me I had RA. My cousin had the disease, and I saw 
what it did to her body. She was in a wheelchair, and her hands 
were like clubs. That night, I went home and cried.
    My doctor tried many drugs, but they did not help. As I 
entered my 60's, my symptoms grew worse. My doctor discussed 
adding gold injections. Just as I was ready to try that, 
something new came on the horizon--a drug called Enbrel. I was 
one of the first in Maine to try this therapy. I got my first 
shot of Enbrel at the doctor's office. The doctor warned me not 
to expect it to work right away. But that day, as I was driving 
back to work, I could feel something going through my body. 
That afternoon, I felt much better. It was incredible. I just 
could not believe it.
    Enbrel gave me my life back. I no longer woke up in the 
morning with excruciating pain or came home in the evening 
aching in agony. Because I had insurance through my job, I paid 
anywhere from $10 to $30 each month depending on my company's 
insurance plan. Every other week, I was able to give myself 
injections. Besides that, I was finally able to live an 
ordinary life. I went to work. I walked, I swam, and I took the 
stairs because I could.
    For 19 years, I depended on Enbrel. My employer-sponsored 
insurance switched several times over the years. But every 
time, my employer went out of his way to find an insurer that 
would cover my Enbrel.
    Although I did not really want to stop working, I retired 
in December 2016 at the age of 79. I would no longer have 
insurance through work. In the transition to Medicare, I was 
devastated to learn that I would have to pay $3,800 a month if 
I were to remain on Enbrel. $3,800 a month! I do not have that 
type of money. I feared I might have to sell my house. I was 
afraid that if I went without this medication I would end up 
back in so much pain and even in a wheelchair. The anxiety 
started causing heart palpitations that put me into the 
hospital on more than one occasion, one time over Christmas.
    My rheumatologist proactively helped to find me an 
affordable option. He suggested a treatment called Remicade. It 
was not self-administered like Enbrel. Instead, I would have to 
go into the doctor's office to receive the infusion. Worse, 
there was no way to know whether or not it would work. I was 
scared. I knew that Enbrel had worked well for nearly two 
decades, and stopping it felt like going backward. I even 
called Medicare, and told them, ``I don't understand. I am 
actually saving you money by administering the Enbrel myself.'' 
They said that is the way it is.
    I was nervous the day I went to the doctor's office for my 
first injection of Remicade. Thankfully, after a year on this 
treatment, it has worked. It is not convenient compared to 
administering the drug myself. I have to go into the doctor's 
office in Portland once a month, and each infusion takes about 
2\1/2\ hours.
    I do not understand why I need to pay nearly $4,000 in a 
single month for a drug that for years I had for no more than 
$30 a month. I am grateful that I do have something that works 
so that I can be productive for my family, my church, and other 
friends who are not as fortunate as I am. But I feel very 
strongly that people should be able to access the treatment 
they need at an affordable cost.
    Thank you for the opportunity to testify, and I am happy to 
answer your questions.
    The Chairman. Thank you very much, Mrs. Bernard, for such 
compelling testimony. We really appreciate your sharing your 
story with the Committee.
    Mrs. Bernard. You are welcome.
    The Chairman. Dr. Harvey.

STATEMENT OF WILLIAM F. HARVEY, M.D., RHEUMATOLOGIST, ASSOCIATE 
     PROFESSOR OF MEDICINE, CLINICAL DIRECTOR, DIVISION OF 
         RHEUMATOLOGY, TUFTS MEDICAL CENTER, BOSTON, MA

    Dr. Harvey. Thank you, Chairman Collins, Ranking Member 
Casey, and distinguished members of the Committee, for allowing 
me to speak with you today. I am here representing thousands of 
rheumatologists and our millions of patients who struggle to 
manage their disease in large part due to the high cost of 
treatment. I wear on my lapel a bent fork, which is a symbol 
from the American College of Rheumatology, to remind folks that 
when you have arthritis, even simple tasks like using a fork 
can be difficult.
    Rheumatoid arthritis is the most common of more than 100 
autoimmune diseases affecting the joints and afflicting over 
1.3 million Americans. It is more common in women and is a 
lifelong illness, so there are many seniors today living with 
rheumatoid arthritis.
    Untreated, rheumatoid arthritis leads to significant joint 
damage, disability, and pain. Fortunately, today we have many 
effective treatments.
    For a long time, the only treatments available were highly 
toxic medications like gold salts that Ms. Bernard mentioned 
and steroids which cause a lot of comorbidities. But these 
really only work in about half the patients. The rest will 
require more potent medication, and more recently, a new class 
of therapies called biologics have emerged to treat these 
conditions. These medications have highly complex manufacturing 
processes, as has been alluded to, and thus have a very high 
cost. Copays for the oral therapies may be less than $50 a 
month, but for the biologics the copay is often several hundred 
or even thousands of dollars.
    Choosing the right therapy for a patient is a complex 
decision that considers other conditions and medications a 
patient may have, balancing the risk of side effects and many 
patient-specific factors. Most physicians believe in the 
importance of shared decision-making, where the treatment goals 
and concerns of the patient are incorporated into the medical 
decision-making. Most rheumatologists would start treatment 
with the oral therapies, as you heard, but, again, only half of 
the patients will respond to these therapies.
    Factors to consider when choosing the right biologic 
therapy include medications already tried, history of 
infections and malignancy, and the ability to administer the 
medication to themselves. But, overwhelmingly, the primary 
factor for the decision is which one is best covered by 
insurance. Because of their high cost, every one of these 
therapies requires prior authorization before use from the 
payer, and that is a process that can take days to weeks to 
complete before a patient can start treatment. A 1-to 3-month 
trial and error may be necessary, as we do not have enough 
scientific evidence to determine which therapies may be best. 
The result may be that it takes months to get the patient's 
disease under control.
    I mentioned the prior authorizations. Each insurance 
company has a different set of forms requiring different kinds 
of information. Most require that the patient have their 
medication provided by a specific pharmacy, called a specialty 
pharmacy. And that is because insurance companies, usually 
through pharmacy benefit managers, negotiate price discounts in 
exchange for preferred placement on the insurance formulary. If 
a provider or a patient wishes to have a medication that is not 
preferred, the prior authorization will be denied, and the 
provider must go through escalating steps of appeals, usually 
to the tune of more than a hour of that provider's time, in 
order to successfully procure the medication for the patient.
    Many practices have begun to employ at significant expense 
other kinds of providers such as nurse practitioners, physician 
assistants, or pharmacists to navigate this process. Without my 
pharmacist, Jinkyu Lee, our resident ``insurance wizard,'' we 
would drown in the administrative burden of getting medications 
for patients.
    So to address this issue, I strongly endorse regulation 
requiring insurance companies to at least follow a standard, 
transparent process for documenting, evaluating, and approving 
prior authorization requests. Every minute spent away from a 
patient is a waste of time and limits access for other 
patients.
    I also mentioned the trend of pharmacy benefit managers to 
address the rising costs of therapies. At face value, the 
concept makes intuitive sense, allowing companies to negotiate 
the best possible prices for treatments. While well intended, 
the use of pharmacy benefit managers has led to a very opaque 
process that favors maximizing payers' profits over the shared 
decision-making which utilizes that sacred bond between a 
doctor and their patient. Pharmacy benefit managers are for-
profit companies that make the most profit when the list prices 
of drugs are higher because there is then a greater margin for 
them to make their profit.
    I strongly endorse requirements to increase transparency 
for pharmacy benefit managers--starting with properly defining 
terms like what is a rebate and what is permitted--and for 
passing savings directly on to consumers, which most insurance 
companies do not do even when they negotiate a lower price.
    Out-of-pocket expenses, as I noted, are substantial, and 
certainly Mrs. Bernard has given poignant testimony to that 
effect. Asking patients to pay their ``fair share'' is immoral 
and indefensible when it leads to medical bankruptcy. These 
copays were designed to incentivize people to choose the 
cheaper therapy, but in these cases there is no cheaper 
alternative. For these beneficiaries, the only option is to 
avoid the self-injectable treatments and get the infusion 
treatments, as you just heard.
    Last, I want to focus on the importance of biosimilars. 
These are treatments which are similar to but not exact copies 
of biologics, and a safe and vibrant biosimilar marketplace is 
essential to the future of rheumatologic care. In Europe, where 
biosimilars have been introduced into the market earlier, they 
have seen an approximately 30-percent reduction in the total 
cost of treatment. However, this level was not achieved until 
there were three to four competitor medications on the market. 
The FDA does have a process for approving biosimilars, and two 
biosimilars to Remicade are on the market. I encourage the 
Committee to support adequate funding for the FDA to approve 
these therapies and to address the issue of extended patent 
litigation which prevents other competitors from reaching 
market.
    I have discussed a number of these important issues, but 
the most important thing is that we continue to work together 
and continue to discuss these important issues so that the 
story that you just heard like Mrs. Bernard's never happens.
    Thank you again for allowing me to be with you today.
    The Chairman. Thank you, Dr. Harvey.
    Dr. Hoadley.

STATEMENT OF JACK HOADLEY, PH.D., RESEARCH PROFESSOR EMERITUS, 
   HEALTH POLICY INSTITUTE, McCOURT SCHOOL OF PUBLIC POLICY, 
                     GEORGETOWN UNIVERSITY

    Dr. Hoadley. Thank you, Senator Collins, Senator Casey, and 
members of the Committee. I am a research professor emeritus at 
Georgetown University. I also serve, as the Chair mentioned, on 
the Medicare Payment Advisory Commission, MedPAC. I will 
emphasize I do not speak on behalf of the Commission, but I am 
representing the views of myself as an individual. And I do 
appreciate this opportunity to share my perspectives about the 
cost of rheumatoid arthritis drugs.
    Today several drugs are available to treat rheumatoid 
arthritis, as you have heard. This should offer us the benefits 
of robust market competition and, thus, lower prices. The 
reality is otherwise. From a Medicare perspective, three drugs 
dominate the RA drug market. Each is used by 50,000 to 60,000 
beneficiaries every year, and each cost the Medicare program $1 
billion to $1.5 billion in 2015. They are among the costliest 
drugs in the Medicare program.
    One of them, Remicade, as you have heard, is covered under 
Medicare Part B because it must be administered by a clinician. 
Beneficiaries who take this drug must pay 20 percent 
coinsurance, although that cost for many may be covered by 
supplemental insurance or Medicaid and, thus, ends up being 
less expensive. In 2015, the average beneficiary taking 
Remicade incurred $4,280 in cost sharing. Again, that may be 
picked up by supplemental insurance. Spending on Remicade has 
been rising at a rate of 8 percent per year.
    The other two, Humira and Enbrel, are covered under 
Medicare Part D because they can be self-injected. Beneficiary 
cost sharing varies across the year in the different Part D 
benefit phases. In 2015, beneficiary out-of-pocket costs for 
these drugs averaged about $1,600, but would be much higher for 
someone taking a full dose for the entire year. Beneficiary 
costs would also have been even higher if Congress had not 
phased out the coverage gap, or ``donut hole,'' as Senator 
Casey mentioned. Total program spending on Humira more than 
tripled from 2011 to 2015, in just 4 years, and it more than 
doubled for Enbrel. Each experienced a 4-year price increase of 
80 percent, nearly 20 percent each year.
    What can we do to stem these rising costs? The most 
important step is to increase the role of biosimilars, as you 
heard from Dr. Harvey. The FDA has approved biosimilars for all 
three of these common RA drugs, but as of today, the 
biosimilars for Enbrel and Humira are not on the market because 
of patent litigation. In fact, the biosimilar for Humira will 
not be launched until 2023 because of a legal settlement. That 
is 5 years away. Remicade's biosimilars are on the market, but 
early indicators have not shown a lot of impact on pricing, but 
that may change.
    At MedPAC, we approved a set of recommendations which we 
thought would strengthen the ability of Medicare to stimulate 
market competition and to lower prices. One recommendation 
calls for a common Part B billing code for all of the 
biosimilars and the original biologic that they are comparable 
to. The idea is to increase price competition because all of 
the competing drugs would be paid based on the average price 
for all of them, and that is not true of the way the system 
works today.
    The Commission also called for a new and voluntary Part B 
drug value program that would be a program to allow private 
vendors to negotiate lower prices and share the savings with 
providers, with beneficiaries, and the taxpayer.
    Last month, the Commission also voted for a recommendation 
that would change the Part D manufacturer's coverage gap 
discount program so that biosimilar manufacturers pay the same 
50 percent discount as that paid by the original biologics, the 
manufacturers for those. This step would level the competitive 
playing field between these drugs. Right now, the incentives 
are such that plans are less likely to use the biosimilars.
    These important steps should strengthen the competitive 
impact of biosimilars, but their widespread use and savings 
will also depend on other factors: the establishment of 
interchangeability status by the FDA, resolving the patent 
litigation issues, state laws on biosimilars substitution at 
the pharmacy, general acceptance by clinicians and patients; 
and further research on what happens when patients do switch 
between different drugs and make sure there are no adverse 
effects.
    Finally, let me take note of some additional MedPAC 
recommendations to bring more savings for beneficiaries who 
take expensive RA drugs.
    As I mentioned before, the Commission made a set of Part B 
recommendations last June, and I mentioned a couple of items 
from that set. Another item in that set would require 
manufacturers to pay a rebate when the drug's average sales 
price rises faster than inflation. Beneficiary cost sharing 
would then be based on the inflation-adjusted price, so that 
would be a means of combating some of the price increases we 
have seen.
    For Part D, the Commission made a set of recommendations in 
June 2016. I will highlight two of them.
    One is a hard cap, a new hard cap on beneficiary out-of-
pocket costs so that beneficiaries would pay nothing after they 
exceed the catastrophic threshold, which is about $5,000 out-
of-pocket. Still a lot of money, but at least once you get to 
that threshold, under this proposal there would be no 
additional cost for the rest of the year.
    Another is a reduction in the federal reinsurance from the 
current 80 percent in the catastrophic phase down to 20 
percent. Right now the Federal Government reimburses the plans 
for 80 percent of costs of drugs for those people who exceed 
that catastrophic threshold, and the change is designed to 
create a stronger incentive for Part D plans to manage costs 
and negotiate the lowest possible prices while maintaining a 
20-percent reinsurance to still accomplish the goals that 
reinsurance has provided.
    Today the biologics used to treat rheumatoid arthritis are 
expensive, both for the beneficiary and for the taxpayer. 
Biosimilars bring the potential for a more competitive market 
and lower prices. But policy changes could lower the barriers 
to getting to that endpoint. Also, the Congress should consider 
other policies such as the ones I mentioned to lower cost for 
Medicare and its beneficiaries.
    Thank you for the opportunity to testify. I appreciate it.
    The Chairman. Thank you very much, Doctor.
    Mr. Mahn.

     STATEMENT OF TERRY G. MAHN, J.D., MANAGING PRINCIPAL, 
REGULATORY AND GOVERNMENT AFFAIRS PRACTICE GROUP LEADER, FISH & 
    RICHARDSON, WASHINGTON, DC, AND ADVISORY BOARD MEMBER, 
     BLOOMBERG BNA PHARMACEUTICAL LAW AND INDUSTRY REPORT, 
                         WASHINGTON, DC

    Mr. Mahn. Thank you. Chairman Collins, Ranking Member 
Casey, and members of the Committee, thank you for this 
opportunity to appear before you today.
    After listening to this wonderful testimony and moving 
testimony, I guess it is no surprise that the attorney talking 
about patents is at the end. I hope I do not bring this hearing 
down.
    My testimony today will focus on intellectual property---
patents, to be more precise--and the important role that they 
play in driving the discovery and development of new drugs and 
medical therapies. I will try to relate how patent protection 
can impact the cost of drugs and health care generally, and I 
will try to offer some insights on how these forces can be kept 
in balance. And before I say anything further, please 
understand that these comments are mine alone and do not 
reflect the thoughts or views of my law firm or any of its 
clients.
    Every spring, I co-teach a 3-day patent course on the 
Hatch-Waxman Act and the law of biosimilars. I always begin the 
course by pointing out two related statistics that frame the 
issues for the rest of the session: the first statistic 
underscores the low probability of success associated with new 
drug discoveries; and the second statistic highlights the 
extraordinarily high cost of bringing a new drug discovery to 
market.
    First, the probabilities. According to the Pharmaceutical 
Research and Manufacturers Association, for every 5,000 to 
10,000 new compounds, newly discovered compounds with 
therapeutic potential, only 250 actually make their way into 
pre-clinical testing, only 5 will qualify for clinical trials, 
and then only one results in an approved drug. So you start 
with 5,000 to 10,000 new discoveries to produce one drug.
    Second, the costs. According to Tufts University, which has 
modeled the cost of developing new drugs for well over a 
decade, in 2015 the fully loaded cost of bringing a new drug to 
market exceeded $2.5 billion. Any way you look at this data, 
the facts are indisputable. Drug development is an enormously 
costly and risky business.
    Because the pharmaceutical business is essential to our 
public health, however, our legal system must properly 
incentivize and appropriately reward its risk takers. This is 
where the patent system comes in. In exchange for publicly 
disclosing new drug discoveries, the law grants patent owners a 
monopoly on those discoveries or inventions for a limited time. 
Ideally, this should only be long enough for patent owners to 
recover their investment and return a reasonable profit. After 
that, these new drug developers should be willing to face 
market competition so that the public will benefit from lower 
cost medications.
    In fact, this was one of the important goals of the 1984 
Hatch-Waxman Act, and after 34 years of tinkering--Congress has 
amended the act about a dozen times--many would argue that 
Congress now has it just about right. Today 85 percent of all 
prescriptions are filled with generic drugs, 35 percent of all 
industry revenues go to generic manufacturers, yet brand 
investment in new drug research and development is at an all-
time high, exceeding over $100 billion annually. More tellingly 
perhaps, in 2017 FDA approved more novel drugs than in any year 
over the previous decade. So, from the data, it looks like this 
legislation is working well for the American public.
    Still, achieving that brand/generic balance has not been 
the smoothest of roads. At its core, Hatch-Waxman radically 
simplifies the drug approval process by allowing generic 
applicants to piggyback on the proprietary clinical data 
strictly required for brand drug approval. In return, the 
generic must await the expiry of brand patents, which are 
listed in the FDA's Orange Book, or it must challenge those 
patents for earlier market entry. If challenged, the Hatch-
Waxman Act affords the brand an opportunity to litigate those 
patents prior to generic launch.
    The math then becomes simple. The more patents obtained for 
a drug, the longer the litigation, the slower the entry of 
generic drugs. Even after a generic drug is approved for 
launch, if patent litigation is ongoing the potential damages 
for infringement can be enormous, such as lost profits. That is 
a risk that is too great for most generic companies to bear. 
Thus, under the original Hatch-Waxman scheme, brand 
manufacturers were incentivized to list as many patents as 
possible in the FDA's Orange Book and then litigate them 
aggressively as a business strategy to slow down competition 
and preserve their market share. This patent-gathering tactic 
has been pejoratively called ``ever-greening.''
    Congress through legislation and FDA through various 
rulemakings over the years have taken deliberate steps to stop 
patent ever-greening. But those efforts have only been 
partially effective. A recent study by The Hastings College of 
Law examined the types of patents submitted for Orange Book 
listing between 2005 and 2015 and concluded that it is alive. 
For example, the study found that: 74 percent of patents listed 
over this period were for previously approved drugs; 80 of the 
top 100 selling drugs listed a new patent at least once; and 50 
listed a new patent more than once; and 40 percent of all drugs 
listed new patents, with 80 percent of those listing patents 
more than once and some as many as 20 times.
    In addition, brands have ventured into other areas to 
assert their patents, including the patenting of REMS programs, 
entering into ``pay for delay'' settlement agreements, and 
implementing so-called product-hopping strategies. Nonetheless, 
and despite anecdotal evidence, to my belief from all the 
available data, the Hatch-Waxman balance is working as 
intended, as both the new drug and generic businesses appear to 
be thriving.
    I do not want to run over my time too much, but I have a 
few things to say about the biologic space, so I will go 
quickly.
    So what about the biologic drug side? Well, as we know, 
until 2010, the U.S. drug laws did not provide an abbreviated 
approval pathway for ``me-too'' biologics, known as 
biosimilars. The Affordable Care Act sought to change that with 
new rules for approving biologic drugs that were loosely 
modeled on the Hatch-Waxman scheme. Yet stark differences 
remain. Most biologic drugs are produced by living organisms 
and, thus, are very large molecules, very difficult to 
characterize, and almost impossible to duplicate, even from 
batch to batch. For this reason, biosimilars must be studied 
much more carefully than small-molecule generics to determine 
their therapeutic equivalence to the brand drug. Clinical 
trials and detailed scientific analyses are required for 
biosimilars resulting in an approval process that is slower and 
much more expensive than for generic drugs. Moreover, full 
substitutability of a biosimilar for the brand drug, which is 
automatic in the generic world, requires separate FDA licensing 
of the law, a process that has yet to be fully developed or 
understood. Accordingly, only the most financially well-heeled 
manufacturers can afford to enter the biosimilar space which, 
understandably, limits future competition. Still, the rewards 
are tantalizing. In 2015, for example, nine of the top ten 
best-selling drugs in the world were biologics that averaged 
over $8 billion in annual sales.
    As one would expect, patents play an important part in the 
development of biologic drugs and the market entry of 
biosimilars--only more so as compared to small-molecule 
generics. First, due to the complexity of these molecules and 
the processes required to grow them, many more opportunities 
exist for securing patent protection. Take Humira, for example. 
In 2015, we counted 76 patents that protected this $16 billion 
franchise; by 2017, the number was over 100 and still growing. 
Second, the biosimilar legislation creates an elaborate scheme 
involving two potential waves of patent litigation prior to 
biosimilar launch. Although the Supreme Court ruled last year 
that the first wave is optional, that does not diminish the 
fact that a large portfolio of patents presents an equally 
large barrier to entry.
    So, to summarize, as of this date, as we have heard from 
Chairman Collins and others, FDA has approved only a handful of 
biosimilar drugs, nine to be specific--five in 2017 alone, 
three of which are now on the market. Patent litigation is 
tying up 18 other biosimilar applicants who have approved or 
pending applications. And early pricing shows only a 15-percent 
discount off of the brand biologic, 35 percent in the case of a 
second generic for Remicade that has entered the market. 
Several reasons for this small discount that you do not see on 
the generic side: much higher regulatory costs to market entry; 
fewer anticipated competitors; no assurances of automatic 
substitution, thus requiring much higher direct marketing to 
physicians and hospitals; and the significantly higher costs 
for manufacturing.
    An example in Europe may tell a story, which is ahead of 
the U.S. in biosimilar approvals. Yet the discount from the 
brand--I am sorry. Three biosimilars are on the market for 
Remicade in Europe, yet the discount from the brand is only 45 
percent. The comparable discount for a three-competitor generic 
drug would be in the vicinity of 85 percent.
    I have attached to my testimony a year-end blog prepared by 
my firm that contains some relevant data on pricing that should 
be instructive to the Committee. Thank you again for this 
opportunity to appear. I would be happy to try to answer any 
questions.
    The Chairman. Thank you very much for your testimony.
    Mrs. Bernard, I cannot imagine how you must have felt when 
you learned that your copay was going to go from $10 to $30 a 
month when you were privately insured through your employer to 
an astounding $3,800 a month for a drug that you had been on, a 
biologic that you had been on for decades that had made such a 
difference to you. Could you first explain what your reaction 
was? And, second, if today your copay went back to the level 
that you had paid, the $10 to $30 a month, would you switch 
back to Enbrel or would you stay on Remicade?
    Mrs. Bernard. Well, some of these drugs, they do not know 
if you--when you switch back, if they will do, you know, what 
they did at the beginning. Enbrel, I cannot stress to anyone so 
much, it is such a wonderful, wonderful drug. And I was--first 
of all, I panicked because I am thinking, ``What am I going to 
do?'' Because myself, I am a widow, and I do not have the 
money. And, really, panic set in. It really did. And I am 
thinking, ``How dare they take something away from us,'' 
meaning everybody that has rheumatoid arthritis, ``and say you 
cannot have it anymore?'' Because you cannot afford it. And 
that is what is sickening to me to know that they have that 
much power to take something like that away.
    The Chairman. Thank you. This is something we are going to 
follow up on with Medicare, with CMS about, because you raised 
a really good point, that you used to be able to self-
administer Enbrel. Now you have to go to a doctor's office for 
a 2\1/2\ hour infusion, which clearly adds cost to the system. 
And this is an issue that we will follow up on.
    Dr. Harvey, the prices of these biologic treatments have 
increased year after year after year, and, in fact, the New 
York Times recently reported that the price of Humira had risen 
by 100 percent from 2012 to today, from $19,000 to $38,000 for 
a year of treatment. Just in January, we saw another price 
increase of nearly 10 percent.
    So you have dealt with this drug for many years and 
prescribed it. Has there been a difference in the drug's 
formulation that was significant over the years that would 
account for such an enormous price increase based on your 
knowledge?
    Dr. Harvey. Senator, that is a great question. I cannot 
speak to what these companies do inside their laboratories, but 
I can tell you at the point of care with patients, there is no 
difference whatsoever in the efficacy of these therapies over 
the course of that time period.
    The Chairman. Thank you. That is often what we have found, 
that the drug has not changed, the biologic has not changed, 
and yet the price has gone through the roof. And these are 
wonderful medicines that really change lives and make a big 
difference, but it is hard to understand why there is such an 
increase.
    Mr. Mahn, you mentioned a patient device that is used, 
which I am wondering why we just do not crack down on or why 
the FTC does not prevent, and that is pay for delay. Could you 
explain how that can prevent a biosimilar or a generic drug in 
the case of a chemical compound from coming to the market?
    Mr. Mahn. Thank you for that question, Senator Collins. Pay 
for delay commonly refers to an agreement between a brand and 
generics, one or more generics, that keep the generic off the 
drug based on patent rights. In other words, the patent is 
asserted by the brand. The generic is at risk of infringing the 
patent, and so the brand pays the generic money to stay off the 
market until the patent expires. And they basically settle up 
front a litigation that could cost them a lot of money. The 
brand makes out. The generic makes out. The consumer does not 
make out.
    When those pay-for-delay settlements are for a legitimate 
purpose, which is related to the patent and its fair licensing, 
they are acceptable under the law, as the Federal Trade 
Commission has said. But when they are anticompetitive or there 
are other ulterior purposes that the parties have in mind, it 
can be actionable, and the FTC has brought actions against some 
of these companies for pay for delay. There has been a Supreme 
Court decision on the matter, and there has been a cracking 
down on pay for delay, and it is much more difficult nowadays 
for those agreements to withstand muster.
    The Chairman. My time has expired, but I appreciate that 
explanation. In another round I want to talk to you about 
patent thickets, because the fact that Humira has 100 patents, 
many of which were added late in the process, I think is 
another technique that is used.
    Senator Casey?
    Senator Casey. Dr. Harvey, I will start with you. You 
mentioned in your testimony that treatment for rheumatoid 
arthritis can be out of reach for some patients and far too 
costly. In your testimony, you talk about an interaction you 
had with a particular patient who was scared to tell you that 
she could not afford her treatment. You indicated she was 
scared to tell you this even though the result was, in your 
words, ``suboptimal disease control and disability.''
    Can you share additional information about what might 
happen to a patient's condition when they cannot afford their 
medication?
    Dr. Harvey. I am happy to do that. Thank you for the 
question. So there are less expensive medications that can be 
used. The most commonly used one would be prednisone. It is a 
steroid, and it has a tremendous amount of side effects. It can 
cause diabetes. It can cause hypertension, weight gain, and 
obesity. It can cause osteoporosis. And so when patients cannot 
afford the more effective therapy, we often use low doses of 
this therapy to try and treat them.
    Still, it is often suboptimal, and when that happens you 
begin to develop irreversible joint damage. Once the joint 
damage has occurred, there is no therapy in existence today 
that repairs those joints. And so you start a downward spiral 
that can lead to disability. It can lead to absenteeism from 
work. It can lead to presenteeism at work where you are at work 
but less effective in your job. And the impact from an economic 
perspective of this phenomenon is very difficult to capture.
    I would also say that at the end of the day, when patients 
cannot afford their medication, they are at risk for permanent 
disability, which then oftentimes results in them being 
supported by our government through disability services. So, 
really, it is an investment in people's health and future that 
we need to be more confident in making.
    Senator Casey. Doctor, thank you.
    I wanted to go to Dr. Hoadley. I mentioned in my opening 
comments the donut hole, the coverage gap. We actually should 
come up with a better phrase for that. It sounds far too benign 
when somebody gets hit with those kinds of costs.
    The national numbers in terms of what has happened since 
the Affordable Care Act is about $26 billion in savings for 12 
million people with Medicare. How has this policy change--this 
one policy change, I should say, addressed affordability for 
patients or improved treatment options for patients?
    Dr. Hoadley. Thank you. That is a great question. It has 
really made an enormous difference. Instead of paying the full 
cost of a drug like Enbrel or Humira, about $5,000 a month, the 
price in that coverage gap phase is now--this year, it was 
brought down to $1,700. So remember that the Part D benefit has 
an initial coverage period, and then it goes into that coverage 
gap or donut hole, where originally you paid the full price of 
the drug. But this year the cost sharing to the beneficiary is 
35 percent, and by 2020, when it is completely phased out, it 
will drop to 25 percent, so that will be closer to $1,200 a 
month.
    Now, that is still a lot of money, but it increases the 
ability of these patients to take their medications, get the 
treatment they need, and avoid some of the consequences that 
you just heard about.
    Senator Casey. I know we still have some time to go to try 
to reach that 2020 period.
    Doctor, I also wanted to ask you about building upon both 
Medicare and prescription drug-related improvements that were 
set in motion by the Affordable Care Act. If you have just 
three, what three policy recommendations would you have for 
this Committee to further limit out-of-pocket spending for 
people that actually receive Medicare?
    Dr. Hoadley. Thank you again. I will mention three of the 
items that are part of the package of MedPAC recommendations. 
Again, I do not speak for the Commission, but speaking for 
myself, one is to try to remove some of the obstacles to the 
broad availability of biosimilars. There are certain of those 
steps you can take within the Medicare program. Some of the 
patent issues obviously go outside of Medicare. But there are 
certain things like the way the coverage gap discount is 
structured that can make a big difference.
    Another is the common billing code that I mentioned in Part 
B to really put the biosimilar and the original biologic into 
one coding category to really put them against each other. The 
idea is if you are paying an average price that cuts across all 
of those, then any time the price comes down for one, the 
incentive is for the provider who is providing these drugs to 
go for the less expensive alternative. They can make a little 
money on the cheaper drug. They are going to lose money on the 
more expensive drug. So throwing them into that common coding 
category instead of setting an average sales price for each 
product has the potential to create some savings.
    The third is in the Part D side, you know, we just talked 
about the coverage gap. Once people leave that coverage gap 
phase of the benefit, they go into the catastrophic phase. Now, 
usually when we talk about catastrophic coverage, it means you 
do not pay anything more. But in the Medicare Part D program, 
you continue to pay 5 percent of the cost of the drug. And so 
for a $5,000 drug like Enbrel, you know, that is still a lot of 
money. That 5 percent is still going to add up to $250 a month. 
And if we put a hard out-of-pocket cap on the program, then 
once people reach that maximum number of dollars, then you 
would not have to pay anything more for the rest of the year.
    I would emphasize that the recommendations we made at 
MedPAC were a package and I think they go together, but I am 
just pulling a few out to highlight.
    Senator Casey. Thank you, Doctor.
    The Chairman. Thank you, Senator Casey.
    Senator Tillis?
    Senator Tillis. Thank you, Chairman. And thank you all for 
being here.
    I wanted to start, I think, with Dr. Hoadley. Dr. Hoadley, 
I worked in research and development in the high-tech sector, 
but in research and development back in the 1980's. And as a 
product manager, when a new idea would come to me to try and 
build a business case for an R&D investment, I had to take a 
look at what my timeline was going to be--you know, what was 
the market life of this invention? I worked at Wang 
Laboratories up in Boston--and what the timeline was going to 
be and whether or not it was viable. And I am kind of curious 
to see, you know, we have had some bad actors in the 
pharmaceutical industry. We had the hearing I think when the 
Turing subject was up. Those are bad actors. You just need to 
deal with them and hopefully put some of them in prison. But I 
still hold out the belief that the pharmaceutical industry and 
the research and development capability they have is a very 
important part of developing treatments and cures that can 
address some of the health problems in the country.
    So I am trying to get an idea maybe from you in terms of 
what kind of things can we work on that both those advocating 
for changes, those who have legitimate concerns about patent 
lengths, those sorts of things, but what kind of discussion can 
we get into that could bring the industry and people on both 
ends of the argument together in terms of any specific maybe 
quick hits or low-hanging fruit to really make progress, in 
your opinion or the opinion of anybody else on the panel?
    Dr. Hoadley. Yes, thank you. It is a good question. And I 
think, you know, again, to focus on the biosimilar, original 
biologic competitive field, this is an area where we are trying 
to get the market to work. You know, in the traditional drug 
field, generics come in and have been one of the reasons why 
drug costs leveled off for much of the period from, you know, 
2005 or so to about 2015. We did not see a lot of growth in 
drugs because a lot of those popular drugs to treat blood 
pressure and cholesterol had new generics entering the market, 
and people were able to switch to those generics and accomplish 
savings that were often in the range of 80 to 90 percent 
discounts once you had multiple competitors in the market. And 
we need to harness those forces of competition in the 
biological arena. And when you have situations where a drug 
like Humira that has been on the market for, I think, about 15 
years now and because of the patent settlement they got, they 
are going to stay on that market another 5 years, you are 
forgoing the opportunity really to have a robust competitive 
market and let the products compete and bring the prices down. 
And so I think, you know, there are a bunch of steps that you 
could take. It is hard to know exactly what the right--some of 
them I focused on in terms of making sure Medicare does not get 
in the way of competition once they are on the market. But I 
also mentioned things like--and Mr. Mahn mentioned things like 
the interchangeability standard at the FDA and for a drug like 
Enbrel or Humira, which are drugs that people inject themselves 
and pick up at the pharmacy, you know--when you get a 
prescription for Lipitor, the pharmacist automatically 
substitutes the generic version unless the doctor specifies 
otherwise. And should we be in a situation for substitution 
that works like that for some of these biosimilars? And some 
states have been writing laws on what are the right terms for 
doing that. I think those are just areas we need to look more 
into to make sure that once the products get on the market, 
they can really enter into a competition, as well as making 
sure they get on the market in a prompt fashion.
    Senator Tillis. And just back to the comment I made 
earlier, the key here is to make sure--I am concerned with 
making sure we get the policy right so that it does not have an 
effect on the risk that the industry and researchers can take 
on the drugs, because at a publicly traded or privately held 
company that is in this business, ultimately it has to make 
sense, and they have to have some reasonable time horizon to 
recoup whatever investment they have on the risk. But I think 
we have got more work to do.
    Mrs. Bernard, to what extent does the cost of copays and 
cost of drugs affect your ability to actually do what your 
doctor asks you to do in terms of proper treatment? In other 
words, do you believe that there are people out there that are 
simply not complying with the doctor's orders because they just 
simply cannot afford it, a lot of them?
    Mrs. Bernard. Oh, absolutely.
    Senator Tillis. I mean, there are various reasons why 
people do not comply. Some of it is they do not like the 
physical therapy or they do not like the effects of the drug. 
But I think that we have got to realize that one of the biggest 
issues we have in Medicaid is a lack of compliance. Some of 
that is just behavior that we need to change, but some of it is 
because the costs are simply at a point where they cannot do 
it, and they are making a decision to harm their health, and 
that is why this hearing is so important.
    Dr. Harvey, a last question for you. To what extent do 
financial factors weigh in to your decision about the drug 
regimen you are willing to give somebody? In other words, if 
you know you have got a compliance risk, you may be prescribing 
something that may be too costly. Do you make a decision about 
a lesser treatment just because you think it is more likely 
that they will comply with it?
    Dr. Harvey. Every day. And it is a tragedy, actually. The 
reality of the matter is it is easier for a patient to walk out 
of my office with a prescription for oxycodone than it is for a 
treatment that will actually treat their disease, and that is 
contributing to the problems we are seeing in all of our 
states.
    If I may, in response to the question about what you could 
do to try to solve this tension between research and 
development and innovation and controlling costs, I think the 
answer is value. When I buy a screwdriver or a car, I do not 
generally question how much it costs, the manufacture of that 
thing, when I decide whether I want to buy it or not. I decide 
if it has value to me. And so our message to the industry has 
to be we will pay for value, but the difficulty here is we have 
to define it. Defining value is the hardest part of this 
equation, and I think if we work together to do that, then we 
can start having a conversation about what things are valuable 
to pay for.
    Senator Tillis. Thank you.
    The Chairman. Thank you, Senator.
    Senator Gillibrand?
    Senator Gillibrand. Thank you, Madam Chairwoman.
    As many of you are aware, one of the top treatments for 
RA--and this has been addressed by the panelists earlier--is 
Humira. Last month the New York Times reported that between 
2012 and 2018 the price has increased by 100 percent, costing 
patients more than $38,000 a year.
    Dr. Harvey, in your testimony you also describe instances 
where your patients have rationed or gone without treatment due 
to prescription high costs. Given the limited number of drugs 
available to patients for treatment of RA, do you believe that 
companies who significantly raise the price year to year should 
be held accountable? What types of sanctions should we be 
imposing on such companies? And how might such penalties help 
to deter drug manufacturers from engaging in this kind of price 
gouging?
    Dr. Harvey. Thank you for that question. It is a difficult 
one to answer because I am not a policy expert per se. But I 
will tell you that stories like Mrs. Bernard's and the issues 
that happen to patients every day--I just wrote in my testimony 
about a woman who called crying because she had spilled her 
medication. When I said, ``How could you spill the 
medication?'' she told me she tried to inject half of it so 
that it would last longer. It is really just awful what people 
go through to try to extend their therapies.
    So I cannot speak to how we should hold the industry 
responsible. I will just reiterate that we have to do 
something.
    Senator Gillibrand. Drs. Hoadley and Harvey, in your 
testimonies you both described the importance of patient access 
to biosimilar products in order to ensure affordability and 
competition in the market. Under the current system, however, 
it appears that many brand-name biologics have the ability to 
delay expiration of their patents and enter into settlements 
with the competition, thereby ensuring continued control of the 
market, and both of you have talked about that already.
    Should drug manufacturers that block market access to 
biosimilar or generic drugs that would compete with their 
products be fined or otherwise penalized? What sort of 
sanctions might be effective in deterring manufacturers from 
blocking competition? If Congress were to take up legislation 
to address this kind of prolonged market exclusivity, what 
factors should be considered in determining the optimum period 
for which a brand-name drug manufacturer should have regulatory 
exclusivity?
    Dr. Hoadley. You know, it is a great question, and I am not 
sure there are easy answers to it. The issues of what happens 
in these patent cases have a lot of complexities, and I think 
Mr. Mahn talked about there are some cases where there is 
probably legitimate reasons going on around the intellectual 
property. There are other cases that seem much more about pure 
delay tactics. And I think, you know, maybe we need to empower 
the FTC to take a stronger role. Maybe we need to look at sort 
of are there certain legitimate reasons, and then when reasons 
do not meet that test, whatever that test would be--I am not a 
lawyer. I am not going to try to get into the intellectual 
property issues. But then potentially there is either, you 
know, you do not allow that extension to go on, or you 
invalidate that settlement or something like that. I think it 
is something we really need to try to study better and get into 
and figure out how to deal with that.
    Dr. Harvey. And I might also raise a subtle issue that was 
mentioned before about caps on out-of-pocket expense. We talk 
about biosimilars or increased competition. The best that we 
have seen so far is that the price of these therapies with 
competition has decreased 30 to 40 percent. If these medicines 
cost $50,000, it does not matter to the patient who still has a 
copay that is unaffordable.
    So the package that he referred to is really important. 
There has to be not only something that brings down the price 
of the drugs, but also something that limits the expense to the 
patient.
    Senator Gillibrand. This is a very outside-the-box idea, 
but do you think there is any room or relevancy to trying to 
create not-for-profit drug manufacturers who do not have a 
profit motive so they are not focused on things such as price 
gouging and over-exclusivity whose goal is not just shareholder 
profit but perhaps well-being of patients in this country and 
in the world?
    Dr. Harvey. I think it is an interesting idea. I think I am 
going to get an MBA now. But people have talked about that. 
Recently Intermountain Health in the Midwest I think raised the 
possibility of forming a generic drug manufacturing process 
within their organization. So it is being talked about, and I 
think people smarter than me would have to understand the 
business aspects of that. But it is intriguing.
    Dr. Hoadley. I agree it is an intriguing idea. You know, 
one of the things that you find is that some of these drugs get 
developed by startups, sometimes with federal dollar support, 
sometimes with maybe a patient association putting some of the 
money into it, and yet they still end up with very high price 
tags and all the other issues.
    So, you know, we are seeing some of that sort of public 
sector or nonprofit sector building into some of the 
investment. It does make a certain amount of sense to say, 
well, then figure out a way not to have this all be a profit 
motive at the other end of the line.
    Senator Gillibrand. Thank you very much, Madam Chairwoman.
    The Chairman. Thank you.
    Senator Donnelly?
    Senator Donnelly. Thank you, Madam Chair. And to all of 
you, this is a particularly poignant hearing for me. I have a 
family member who has rheumatoid arthritis and who was actually 
in the trials for Enbrel. And, Mrs. Bernard, as you mentioned, 
before Enbrel came along, it was hot showers and trying to get 
going in the morning. And Enbrel changed my family member's 
life to the point where they thought, ``This has worked so 
well. I do not feel any more symptoms. It must have gone 
away.'' And as college students often do in their infinite 
wisdom, decided that they had been cured and stopped taking it, 
and found out shortly after not so much. But it had changed 
lives, just like for you. And when you think of going back to 
where you were before that point, it is just not thinkable.
    And the thing that has always haunted me, Madam Chair, was 
always that my family member who had juvenile rheumatoid 
arthritis, we were able to figure out a way to pay for it. But 
there was some young person with a single mom or single dad in 
the same situation who was still taking hot showers, still 
moving forward with disfigurement simply because they did not 
have the funds to do it.
    And so we had a health system where your future was 
basically dependent on what you could pay and what you could 
not pay, and we had a system where your future of whether you 
were going to be in a wheelchair or not was based on almost 
what house you were born in. And that is just not right. It is 
just not right.
    Dr. Harvey. That is right.
    Senator Donnelly. And so I wanted to ask you, Dr. Harvey, 
you know how our ability to treat rheumatoid arthritis has 
gotten better. Can you talk about what you see in the future, 
what future treatments you are seeing, and where you think this 
is going?
    Dr. Harvey. Sure. Well, I think the most important point to 
emphasize is that when someone walks into my office today with 
a new diagnosis of rheumatoid arthritis, I can tell them with 
reasonable certainty that their hand will never look like my 
fork if they can access the treatments as you alluded to.
    What is coming in the future is, I think, more----
    Senator Donnelly. Which is a dramatic improvement over 
where it was.
    Dr. Harvey. It is a dramatic improvement. In fact, I saw a 
remarkable picture from the Arthritis Foundation. They have 
Hill days--one from the 1980's where everyone was in a 
wheelchair, and one from the 2000's where everyone was 
standing. It is remarkable. It is remarkable.
    What is coming is, I think, more biologic therapies. We are 
starting to learn how to target very specific parts of the 
immune system. Our treatments over time I believe will get more 
specific, more effective. And so I think the trend that we are 
seeing is only going to get larger.
    There is also an interesting bit of research going on in 
the area of nanotherapy, so being able to take medications that 
are already existing today but create very small doses of them 
that get to the place where they are effective so that you do 
not have to give large doses that are toxic to the whole body. 
Again, a lot of research and development into those treatments 
means they are likely to be quite expensive when they do come 
to the market.
    But the story is not over. We are finding new ways to treat 
these patients every day.
    Senator Donnelly. How important has the NIH been to that 
effort?
    Dr. Harvey. Essential. In fact, Enbrel and Remicade that 
Mrs. Bernard is taking were able to be marketed because of 
initial discoveries out of the National Institutes of Health, 
and the primary initial treatment for juvenile arthritis, which 
you referred to, was also based on an NIH discovery.
    Senator Donnelly. When you look at that, how important is 
it to keep the NIH fully funded and moving forward?
    Dr. Harvey. So the NIH plays an important role because they 
do the most basic essential research and development work, you 
know, laboratory work with petri dishes and mice and such, that 
the pharmaceutical companies do not do. They are not doing that 
very basic research. They are taking the discoveries that come 
from NIH and taking them to the next level where they proceed 
with the drug development process. So without that seeding, we 
will not have discoveries in the future, not to mention the 
fact that researchers, including myself and many others, get 
NIH funding in order to do clinical-based research to find out 
how these therapies work most effectively in patients. So it is 
an essential part of our future.
    Senator Donnelly. Thank you very much. And, Mrs. Bernard, 
my goal is that we cure this so that when you are 100 years 
old, you do not even have to worry about it anymore.
    Thank you, Madam Chair.
    The Chairman. Thank you.
    Senator Blumenthal?
    Senator Blumenthal. And I hope we reach 100 years along 
with you.
    [Laughter.]
    Senator Blumenthal. At least Senator Donnelly.
    Thank you all for being here. This hearing has been 
enormously helpful and enlightening, and thanks to our Chair 
and Ranking Member for holding it.
    Dr. Harvey, as a practicing rheumatologist, your voice is 
very, very important in this discussion. My understanding is 
that rheumatoid arthritis therapies typically come either in a 
self-injectable form or an intravenous form, and I am sure you 
are aware that nationwide there is a shortage of small-volume 
IV bags as a result of manufacturing facilities in Puerto Rico 
losing power during the recent hurricane. This issue is one of 
profound public health importance, as are shortages of other 
medical devices and other often workhorse medicines, shortages 
that affect the quality of care in Hartford Hospital and other 
hospitals in Connecticut and every hospital around the country.
    I have led a bipartisan, bicameral letter to FDA 
Commissioner Gottlieb on the IV bag issue, and I was pleased to 
see that this letter was supported by Chairman Collins and 
Ranking Member Casey. I appreciate their help and support. This 
letter very simply urges the FDA to use all of the tools at its 
disposal to address these ongoing shortages, which have 
impacted patient health in Connecticut and across the country. 
More specifically, it asks what expanded authorities are needed 
to prevent these kinds of shortages from occurring, and often, 
unfortunately, reoccurring in our health care system, and what 
measures can be taken to assure that companies are creating 
contingency strategies to avoid chronic shortfalls.
    This long-winded introduction to my question is to drive 
the point that with rheumatoid arthritis, as with other 
illnesses, the shortages of critical drugs and devices can be 
very impactful. So my question is: Has this IV bag shortage 
impacted your ability to administer rheumatoid arthritis 
therapies? And do you think that the FDA, in coordination with 
the manufacturers, should do more to establish contingency 
strategies?
    Dr. Harvey. So I am not aware of any instances of the IV 
bag situation specifically affecting our infusion therapies. 
Although they are reconstituted with saline, it is usually a 
small volume, and it is not so troublesome.
    However, we have seen over the years many drug shortages in 
medicines that have been around for decades, like methotrexate 
or hydroxychloroquine, brand name Plaquenil, that happen 
because of manufacturing facility problems--and in some cases 
there is only one manufacturer or two manufacturers of these 
therapies--leading to national shortages of generic drugs.
    And so the answer to your question is yes, absolutely, the 
FDA should do everything in its power and you should grant it 
the power to do whatever it can to address drug shortages as 
quickly as they can.
    Senator Blumenthal. Do you have thoughts about what it can 
or should do?
    Dr. Harvey. Again, a somewhat complicated question, but I 
can tell you that during some of these shortages--we are about 
a 5-hour drive from Montreal--I have had patients drive across 
the border to get their therapies. Our more wealthy patients 
can explore things like reimportation on their own. But, 
obviously, the government can explore that opportunity as well. 
And ensuring that there is redundancy for these essential--
especially the essential sort of safety net therapeutics like 
IV bags, but also drugs that treat rheumatoid arthritis, making 
sure that there are redundancies so that we are not as impacted 
when something happens.
    Senator Blumenthal. And would you agree that it is not the 
sort of--I do not know what layman's terminology might apply, 
not the advanced cancer drugs that cost hundreds of thousands 
of dollars. We are dealing here with workhorse generic 
medicines, saline solutions, IV bags, basic sort of workhorse, 
everyday drugs, correct?
    Dr. Harvey. Yes, sir.
    Senator Blumenthal. I appreciate the opportunity to ask 
you--I know others of you on the panel may have thoughts about 
it, and my time has expired. Thank you.
    The Chairman. Thank you, Senator.
    Dr. Hoadley, actually Senator Blumenthal's question is a 
good intro to my next question, because living in Maine I am 
very well aware of how much less expensive pharmaceuticals are 
on the other side of the border in Canada. We know that our 
country is the global leader in the research and development 
and innovation of pharmaceutical drugs that lead to therapies 
and cures around the world. And yet the prices that we pay here 
in this country are almost always, it seems, higher than what 
people in other countries pay. And the chart that we have 
handed out to you, as well as put on the screen, shows that the 
cost of Humira varies enormously for a 1-month supply from $552 
in South Africa to $1,362 in the United Kingdom to nearly 
$2,700 in the United States.[A copy of the chart follows in the 
Prepared Statements]
    Is the United States essentially subsidizing the cost of 
prescription drugs for the rest of the world?
    Dr. Hoadley. I think it is. You know, it is a really 
interesting question, and I have looked at some of these 
numbers from time to time, and, you know, if you would have 
drawn a picture of this 10 years ago, it would have looked very 
similar. So it is not something that has changed, maybe it has 
gotten worse.
    You know, other countries are making certain decisions 
about how to handle pricing, so in the United Kingdom they have 
the group called NICE that evaluates the clinical and cost-
effectiveness of drugs and helps to make decisions about which 
substitutes should be available and addresses it. Some of these 
countries have other methods for sort of addressing pricing. 
You know, I think we as a country need to look at that question 
and say should we be taking some of those steps here in the 
United States and what would be politically acceptable, what 
would be acceptable to the broad public.
    But, you know, this notion that it has an impact on 
research and development that a lot of people worry about, 
well, these are international companies. I mean, it is not like 
we get our drugs from U.S. companies and the U.K. gets their 
drugs from U.K. companies or Switzerland gets their drugs from 
Swiss companies. We all get them from companies all over the 
globe. It is a true global industry. And if you are seeing 
price differentiations like this, it does seem like it is the 
logical conclusion to say we are subsidizing the world.
    The Chairman. Thank you.
    Dr. Harvey, prescription drug prices are the second fastest 
growing component in health care costs, and when I asked my 
staff, well, what is No. 1, I was really surprised to learn 
that it is administrative costs. And yet your testimony today 
made the light bulb go off because you described how it took an 
hour of a provider's time to get prior authorization from an 
insurer to prescribe a drug that is needed to provide the 
relief that your patients deserve.
    Are there other examples that you--and, Dr. Hoadley, you 
mentioned the need for a common code, for example. So it seems 
like there are some administrative efficiencies that could be 
achieved. But, Dr. Harvey, are there other examples you could 
give us of why administrative costs are the fastest-growing 
component of health care expenditures?
    Dr. Harvey. Sure. So dealing with the step therapy, as I 
mentioned, is a big one. And, in fact, we are even seeing prior 
authorization requests for medications that have been around 
for a long time. I got one the other day for prednisone. I do 
not know why still.
    The Chairman. That is amazing, truly.
    Dr. Harvey. Other things, you know, our reimbursement 
system for physicians is built on evaluation and management 
codes that have pages of instructions on what qualifies for 
various levels of payment. I spend a lot of time doing 
documentation to support revenue which pays for the pharmacist 
and other things because our billing and coding system is 
incredibly complex. ICD-10, for example, changed the number of 
billing codes for rheumatoid arthritis from about 50 to about 
250. So I have to figure out which of those codes is most 
appropriate for billing for an individual patient.
    There are also medical-legal aspects to this where there is 
a certain amount of documentation that has to happen in order 
to protect myself and my organization from the threat of future 
lawsuits. All of this sort of conspires together. Imaging, 
medical imaging, is another one. I have to get prior 
authorizations to get my patients CAT scans and MRIs. I even 
sometimes have to get prior authorization to get a blood test 
for my patient to make their diagnosis.
    It has become a process which is out of control and absurd. 
I will just tell you one quick story about the absurdity. The 
other day I was on a prior authorization appeals process. I was 
assigned to speak with a peer reviewer. This is another 
physician, not a rheumatologist, who was assigned to review the 
case. I told them what I wanted to give for my patient, and I 
heard some keyboards clacking in the background. And after they 
were done clacking, they said to me, ``Well, I just Googled 
this, and I do not see anything about what you were talking 
about for this case.'' You know, if it was that simple, we 
should all go back to Maine tonight and take care of the 
probably thousands of underserved patients there because, you 
know, it is just absurd.
    I understand why these processes are in place. Costs are 
skyrocketing. But there has to be thought about the impact that 
we are doing, because every time I am filling out one of those 
papers, I am not taking care of someone like Mrs. Bernard.
    The Chairman. Thank you. That is a terrible example that 
you just gave, and it is really troubling to me.
    By the way, we are very underserved for rheumatologists in 
the State of Maine. There is only, to my knowledge, one in 
Bangor, Maine, where I live, which is the third largest city in 
Maine. And there are none north of Bangor. One rheumatologist 
in Maine just recently retired who used to do clinics in 
Aroostook County in northern Maine. So if you could send some 
our way----
    Dr. Harvey. In fact, I am, Senator Collins. The fellow who 
is graduating from our training program this year will be 
practicing in Lewiston starting in July.
    The Chairman. I am very happy to hear that. Good work. Keep 
them coming, because, truly, given our population is an older 
population, we really do need more rheumatologists, so I am 
happy to hear that.
    Mr. Mahn, I promised that I would come back to you, and 
this will be my final question. You suggested in your testimony 
that there are times when the brand name manufacturers file for 
a lot of additional patents, and we have noticed in our 
research this often happens when the initial patent is getting 
close to the expiration data, and that at times there are very 
minor changes that are made in packaging, for example, that are 
used to justify additional patents.
    Could you talk to us generally about patent thickets and 
ever-greening? You mentioned ever-greening in your testimony, 
but could you help us better understand the role that plays?
    Mr. Mahn. Thank you, Chairman Collins. So when you talk 
about a patent thicket or ever-greening, it just means really 
if you are a manufacturer assembling a portfolio that protects 
the franchise--Abbvie brags about it in their public 
statements. They brag that their portfolio is so formidable 
that they expect to have the market to themselves through 2022 
or 2023.
    Now, if you look at the two suits that Abbvie has filed to 
protect Humira--and this is the two waves of litigation I 
talked about under the BPCIA, the biosimilars laws. Under the 
first wave, they are litigating, I think, six or eight patents 
against both of the biosimilar entrants that have been 
approved. And they have stated that in the second wave they are 
going to assert another 60-some patents.
    Well, that does not add up to 100, so there are 30 or 40 
that do not apply. And that is a telling story, which is that a 
lot of these patent thickets are, you know, to just be 
formidable, to scare, to say, look, there is a lot that we can 
throw at you.
    Now, you cannot throw, justifiably throw invalid patents. 
You cannot throw patents that do not reasonably--that are not 
reasonably infringed. So as a lawyer representing a client with 
a large portfolio, you cannot just assert it because it has 
been granted. There has to be some good-faith basis--Rule 11, 
we call it--in litigation before you can assert those things. 
So a lot of times the thicket has a lot of underbrush that 
really does not matter.
    In other cases, a lot of these patents are perfectly good 
patents. They cover perfectly sound discoveries and inventions. 
But they are not going to stop competition. They just will not. 
An example, which actually, it is funny, it is anecdotal. I had 
some antihistamine issues, and so I was seeing a doctor, and he 
gave me a prescription after I had gone through some stuff. He 
said, ``Here, try this.'' And I went to the pharmacy, and they 
said, ``Your insurance will not cover this because it is not 
generic.'' So I thought, ``Oh, great. So I will have to pay 
out-of-pocket.'' So I went back to my doctor, and I said, 
``What is this about?'' And he goes, ``Oh, here, here is the 
other prescription.'' I said, ``What is that?'' He said, ``It 
is the exact same drug only you take it twice a day rather than 
once a day.'' And my insurance company covered it completely.
    Well, I thought that was pretty fair. I mean, if they said, 
``Do you want to pay more for once a day or nothing for twice a 
day?'' Now, that was because a patent on the once-a-day 
application was issued, protected--it is also known as product 
copying where you take a product that you have built a market 
around and then you move it as the competition comes after you 
to some new use or some new convenience that the market then 
begins to accept quickly, and then nobody wants the old stuff. 
Well, in a perfect system, a lot of people would want the old 
stuff. They would say, ``OK, look, you have got something that 
is more convenient. Somebody has to pay for that. You are 
entitled to recover the investment you made to make that more 
convenient. And I am not willing to pay for it. I am happy with 
the old stuff.'' But the market does not smoothly work that 
way.
    So a lot of these patents add things on to drugs, but that 
does not mean a generic cannot come along or a biosimilar 
cannot come long and get approval for non-infringing features 
and aspects and uses and so forth to avoid those patents. And 
that is what happens in many cases.
    The Chairman. Thank you.
    Senator Casey?
    Senator Casey. I am all set.
    The Chairman. You are all set? OK.
    I want to thank our witnesses for your testimony today. It 
is a difficult challenge for Congress to come up with the right 
response to the issue of escalating costs of prescription 
drugs. It involves complicated patent issues, as we have just 
heard. It involves the prior authorization problems that 
insurers impose on providers. It involves policies of Medicare 
that are different than private insurers and can impose 
enormous costs on patients as they age into the Medicare 
program. And it involves our desire to make sure that we 
prevent these flagrant abuses of the system that have led to an 
escalation of costs without justification without dampening or 
discouraging the innovation that brings us these wonderful 
biologics and other drugs that make such a difference in the 
lives of people like Mrs. Bernard. And that is a hard balance 
to strike, and it is what we are going to continue to look into 
in this Committee.
    Senator Tillis is right that there are some obvious bad 
actors out there, and we focused on them last year. I will 
never forget one of the CEOs, when we were interviewing him, 
and we asked why did you increase this drug which you had no 
involvement in developing overnight by an enormous percentage, 
and he said, ``Because I can.'' I mean, it was just a case of 
pure, simple greed.
    On the other hand, the statistics that we know of how few 
drugs make it from the laboratory to the market and the cost of 
developing a new drug which can be so expensive urges us to 
take a cautious approach and make sure that we know what we are 
doing when we are dealing with legitimate pharmaceutical 
companies as opposed to what I call ``hedge fund pharma''--a 
term they do not like, by the way, but it does seem appropriate 
in many ways.
    So I want to thank our witnesses for helping us better 
understand exactly the complexity of these issues, and yet I am 
determined that we end the abuses and that we also make life 
easier for patients like Mrs. Bernard, whom I thank very much 
for coming from Maine and sharing your story, and providers 
like Dr. Harvey who want only the best for their patients. So I 
thank all of you for being here today, and I thank our staff 
for their hard work also.
    Senator Casey?
    Senator Casey. Thank you, Chairman Collins, for this 
hearing, and also I want to thank our witnesses for your 
presence here, your testimony, for the time you took today, but 
also for helping us better understand a number of these issues.
    We learned today that living--among other things we 
learned, we learned that living with arthritis is a common 
experience for so many Americans, especially rheumatoid 
arthritis. For people with arthritis, access to affordable and 
appropriate treatment is absolutely essential. We must promote 
pathways to foster innovation and promote access to life-
changing medications. We must also ensure that baby boomers or 
older adults can afford the treatments that work best for them. 
We thank you for your time today, and we are grateful that you 
took the time to be with us.
    Madam Chair, thank you for the hearing.
    The Chairman. Thank you. Committee members will have until 
Friday, February 16th, to submit additional questions for the 
record, so there may be some coming your way.
    This concludes our hearing. Again, my thanks to all of our 
witnesses.
    [Whereupon, at 11:04 a.m., the Committee was adjourned.]

   
      
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                                APPENDIX

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                      Prepared Witness Statements

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 Prepared Statement of Patricia Bernard, Rheumatoid Arthritis Patient, 
                            Falmouth, Maine
    Good morning. Thank you Chairman Collins, Ranking Member Casey, and 
distinguished Members of the Committee for inviting me to testify 
before you today.
    My name is Patty Bernard. I will turn 81 in July, and I have 
rheumatoid arthritis. I have lived with diagnosed RA since I was 55. 
Before the diagnosis and treatment, I experienced excruciating pain--
day-in and day-out. Every bone in my body ached. The pain made ordinary 
tasks difficult, often impossible. I would come home from work and take 
hot, hot showers. It was the only thing that relieved my pain--even 
just temporarily.
    I finally visited a rheumatologist and learned that I had RA. In 
fact, at that time, my doctor informed me that 79-percent of my body 
was inflamed. It was very difficult to hear the doctor tell me I had 
RA. My cousin had the disease, and I saw what it did to her body. She 
was in a wheelchair, and her hands were like clubs. That night, I went 
home and cried.
    My doctor tried many drugs, but they didn't help. As I entered my 
60's, my symptoms grew worse. My doctor discussed adding gold 
injections. Just as I was ready to try that, something new came on the 
horizon--a drug called Enbrel. I was one of the first in Maine to try 
this therapy. I got my first shot of Enbrel at the doctor's office. The 
doctor warned me not to expect it to work right away. But that day, as 
I was driving back to work, I could feel something going through my 
body. That afternoon, I felt so much better. It was incredible. I just 
couldn't believe it.
    Enbrel gave me my life back. I no longer woke up in the morning 
with excruciating pain or came home in the evening aching in agony. 
Because I had insurance through my job, I paid anywhere from $10 to $30 
each month depending on my company's insurance plan. Every other week, 
I was able to give myself injections. Besides that, I was finally able 
to live an ordinary life. I went to work. I walked, I swam, and I took 
the stairs because I could.
    For 19 years, I depended on Enbrel. My employer-sponsored insurance 
switched several times over the years. But, every time, my employer 
went out of his way to find an insurer that would cover my Enbrel.
    Although I didn't really want to stop working, I retired in 
December 2016 at the age of 79. I would no longer have insurance 
through work. In the transition to Medicare, I was devastated to learn 
that I would have to pay $3,800 a month if I were to remain on Enbrel; 
$3,800 a month! I do not have that type of money. I would wake up in 
the middle of the night panicked. I feared I might have to sell my 
house. I was afraid that if I went without this medication I would end 
up back in so much pain and even in a wheelchair. The anxiety started 
causing heart palpitations that put me into the hospital on more than 
one occasion, one time over Christmas.
    My rheumatologist proactively helped to find me an affordable 
option. He suggested a treatment called Remicade. It was not self-
administered like Enbrel. Instead, I would have to go into the doctor's 
office to receive the infusion. Worse, there was no way to know whether 
or not it would work. I was scared. I knew that Enbrel had worked well 
for nearly two decades, and stopping it felt like going backwards. I 
even called Medicare, and told them, ``I don't understand. I am 
actually saving you money by administering the Enbrel myself.'' They 
said that's the way it is.
    I was nervous the day I went to the doctor's office for my first 
injection of Remicade. Thankfully, after a year on this treatment, it 
has worked. It is not convenient compared to administering the drug 
myself. I have to go into the doctor's office in Portland once a month, 
and each infusion takes about two and a half hours.
    I do not understand why I would need to pay nearly $4,000 in a 
single month for a drug that for years I had for no more than $30 a 
month. I am grateful that I do have something that works so that I can 
be productive for my family, church, and other friends who aren't as 
fortunate as I am. But, I feel very strongly that people should be able 
to access the treatment they need at an affordable cost.
    Thank you for the opportunity to testify and I am happy to answer 
your questions.
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                  Additional Statements for the Record

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